Organization, Consolidation and Presentation of Financial Statements (Policies)

6 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Description and Basis of Presentation

Edgewell Personal Care Company and its subsidiaries (collectively, “Edgewell” or the “Company”) is one of the world’s largest manufacturers and marketers of personal care products in the wet shave, sun and skin care, and feminine care categories. With operations in over 20 countries, the Company’s products are widely available in more than 50 countries.

The Company conducts its business in the following three segments:

•Wet Shave consists of products sold under the Schick®, Wilkinson SwordTM, Edge, Skintimate®, Billie®, Shave Guard and our custom brands group (formerly sold under our Shave Guard and Personna® brands), as well as non-branded products. The Company’s wet shave products include razor handles and refillable blades, disposable shave products, and shaving gels and creams.

•Sun and Skin Care consists of Banana Boat® and Hawaiian Tropic® sun care products, Jack Black®, Bulldog® and Cremo® men’s and women’s grooming products, Billie women’s grooming products and Wet Ones® products.

•Feminine Care includes tampons, pads and liners sold under the Playtex Gentle Glide® and Sport®, Stayfree®, Carefree®, and o.b.® brands.

Basis of Accounting, Policy

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its controlled subsidiaries and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) under the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The preparation of the unaudited Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results may differ materially from those estimates. All intercompany balances and transactions have been eliminated in consolidation and, in the opinion of management, all normal recurring adjustments considered necessary for a fair statement have been included in the interim results reported. The fiscal year-end balance sheet data was derived from audited consolidated financial statements, but do not include all of the annual disclosures required by GAAP; accordingly, these unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited annual consolidated financial statements included in its Annual Report on Form 10-K filed with the SEC on November 28, 2023.

Certain immaterial prior year amounts have been reclassified to conform with the current year’s presentation.

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures to update income tax disclosure requirements primarily by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The amendments in the ASU also remove disclosures related to certain unrecognized tax benefits and deferred taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The amendments may be applied prospectively or retrospectively with early adoption is permitted. We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures.

In November 2023, the FASB issued ASU No. 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to expand reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in the ASU require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to an entity's chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. Annual disclosures are required for fiscal years beginning after December 15, 2023. Interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required for all prior periods presented with early adoption is permitted. We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures.

Recently Adopted Accounting Pronouncements

In September 2022, the FASB issued Accounting Standards Update 2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations" which requires that a buyer in a supplier finance program disclose additional information about the program for financial statement users including a rollforward of those obligations. The Company adopted the standard as of October 1, 2023, except for amendments relating to the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023.

The Company has agreements with its suppliers in the ordinary course of business for such supplier finance programs which facilitate participating suppliers’ ability to finance payment obligations of the Company with designated third-party financial institutions. The Company is not a party to the arrangements between the suppliers and the third-party financial institutions. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under these arrangements. The payment terms under the programs range from 60 to 120 days. As of March 31, 2024 and September 30, 2023, $22.8 and $21.8, respectively, were valid obligations under the various programs. The obligations are presented as Accounts payable on the Condensed Consolidated Balance Sheets.

Comparability of Prior Year Financial Data, Policy

Revision of Previously Issued Consolidated Financial Statements

As previously disclosed in the Company’s 2023 Annual Report on Form 10-K filed with the SEC on November 28, 2023, the Company evaluated aged accrued expenditures related to goods received but not yet invoiced by certain of its vendors (“GRNI”). Based upon an assessment, including evaluating the expiry of the applicable statute of limitations of the accrued expenditures, the Company concluded that $8.5 of aged accrued GRNI originating in years 2014 through 2018 were no longer required to be reflected as accounts payable on the Consolidated Balance Sheet as of September 30, 2023 and should have been reversed in prior fiscal years. The Company concluded that the misstatements were not material, either individually or in the aggregate, to its previously issued consolidated financial statements.

To correct the immaterial misstatements, the Company has revised the Condensed Consolidated Statements of Earnings and Comprehensive Income and Condensed Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended March 31, 2023, the Condensed Consolidated Statements of Cash Flows for the six months ended March 31, 2023, as well as the associated Notes to the Condensed Consolidated Financial Statements to reflect the corrections of these immaterial misstatements as of and for the three and six months ended March 31, 2023. There were no changes to previously issued total cash flows generated from (used by) operating, investing, or financing activities for six months ended March 31, 2023.

The following table reflects the revisions to the previously issued Condensed Consolidated Statements of Earnings and Comprehensive Income for the three and six months ended March 31, 2023:

	Three Months Ended March 31, 2023						Six Months Ended March 31, 2023
	As Previously Reported		Adjustment		As Revised		As Previously Reported		Adjustment		As Revised
Cost of products sold	$	356.7	$	(0.6)	$	356.1	$	636.8	$	(1.2)	$	635.6
Gross profit	241.7		0.6		242.3		430.7		1.2		431.9
Operating income	56.2		0.6		56.8		87.5		1.2		88.7
Earnings before income taxes	26.0		0.6		26.6		42.4		1.2		43.6
Income tax provision	7.0		0.2		7.2		11.5		0.3		11.8
Net earnings	19.0		0.4		19.4		30.9		0.9		31.8
Earnings per share:
Basic net earnings per share	$	0.37	$	0.01	$	0.38	$	0.60	$	0.02	$	0.62
Dilutive net earnings per share	0.37		—		0.37		0.60		0.01		0.61
Total comprehensive income	35.8		0.4		36.2		87.3		0.9		88.2

The following table reflects the revisions to the previously issued Condensed Consolidated Statements of Cash Flows for the six months ended March 31, 2023.

	As Previously Reported		Adjustment		As Revised
Net earnings	$	30.9	$	0.9	$	31.8
Changes in operating assets and liabilities	(71.1)		(0.9)		(72.0)